The Washington Post Is Badly Confused About International Trade: Blames Bernanke for Higher ...Comments for The Washington Post Is Badly Confused About International Trade: Blames Bernanke for Higher Food Prices at http://www.cepr.net , comment 1 to 6 out of 6 commentshttp://www.cepr.net
Tue, 03 Mar 2015 16:40:18 +0100FeedCreator 1.7.3QE 2 caused food price appreciation just not how you thinkhttp://www.cepr.net/index.php/blogs/beat-the-press/the-washington-post-is-badly-confused-about-international-trade-blames-bernanke-for-higher-food-prices#comment-6904
First, I dont think it is appropriate to use the announcement of QE 2.0 as the cutoff date as Bernanke telegraphed additional QE to the Market at his Jackson Hole Speech in August. If you look at the DJUBS returns broken up by that date Commodities were down about 6% pre speech and up about 20% post. Mr Baker's analysis above is correct in so much as the money that is printed gets allocated proportionally. However if a disproportional &#xa;g;e of the QE found its way into commodity markets than went overseas then you would have local commodity price appreciation in countries that don't use the $. CFTC data and market observables suggest that there has been unprecedented speculative buying of commodities. Whatever the motivation for these purchases, it is clear to me that these purchases are a (potentially unintentional ) consequence of QE2.0. As a caveat weather related supply disruptions, which probably aren't Bernanke's fault, have further exacerbated the impact of investment flow into the asset class - James DollingerMon, 14 Feb 2011 08:26:44 +0100...http://www.cepr.net/index.php/blogs/beat-the-press/the-washington-post-is-badly-confused-about-international-trade-blames-bernanke-for-higher-food-prices#comment-6810
Come again? You say the dollar did not go down on account of QE2. And you say that the price of wheat did go up on account of QE2. By your logic QE2 is responsible for the price increase in wheat.
N'est-ce pas? - Milton ArbogastTue, 08 Feb 2011 20:41:58 +0100...due to heat waves due to...http://www.cepr.net/index.php/blogs/beat-the-press/the-washington-post-is-badly-confused-about-international-trade-blames-bernanke-for-higher-food-prices#comment-6807
electric toothbrushes. - dieselTue, 08 Feb 2011 15:21:02 +0100...http://www.cepr.net/index.php/blogs/beat-the-press/the-washington-post-is-badly-confused-about-international-trade-blames-bernanke-for-higher-food-prices#comment-6796
If there are really more dollars this should reduce the purchasing power of those dollars already held by some foreigners and foreign governments - some of them have a lot. On the other hand foreigners will be able to buy more American stuff including food with their own currency. How this works out may be different in different countries - those like China who have been accumulating dollars obviously don't like inflation in the US. How many dollars does Egypt have? Whether QE2 is really inflating is another question, as Dean says. It certainly hasn't reduced interest rates.
But world grain and other food prices are affected far more by weather than by exchange rates and monetary policy, and also by political matters such as internal farm policies and international agreements such as the US-USSR grain-trade deals of past years. Governments often buy up and dispose of surpluses to keep their own farmers happy.
There is nothing new about the influence of the USSR/Russian grain harvest on world price - current real prices still do not exceed those reached in 1973-4 after another series of failures. It is absurd to claim the current shortage is due to global warming.
- skeptonomistTue, 08 Feb 2011 03:57:13 +0100blame global warming?http://www.cepr.net/index.php/blogs/beat-the-press/the-washington-post-is-badly-confused-about-international-trade-blames-bernanke-for-higher-food-prices#comment-6794
i agree with Andrew Dover- more primary cause is poor harvest due to heat waves due to... - frankendufTue, 08 Feb 2011 03:13:54 +0100Wheat prices causationhttp://www.cepr.net/index.php/blogs/beat-the-press/the-washington-post-is-badly-confused-about-international-trade-blames-bernanke-for-higher-food-prices#comment-6792
A look at long term wheat prices
http://www.indexmundi.com/commodities/?commodity=wheat&months=360
Recently, Russia had two high years of wheat production, then a lower one.
Russia 44,900 49,400 63,700 61,700 41,500
years 06-07 07-08 08-09 09-10 10-11
Russia alone accounted for about 1/2 of the drop in world wheat production.
Local Marketing Years, Thousand Metric Tons from
http://www.fas.usda.gov/grain/circular/2011/01-11/grainfull01-11.pdf
- AndrewDoverTue, 08 Feb 2011 02:25:31 +0100